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2019 (9) TMI 807 - ITAT AHMEDABADProfits arising on sale of land - Correct head of income - ‘business income’ OR 'capital gains' - CIT(A) upholding the action of the AO for treating the profits arising on sale of land as ‘business income’ instead of capital gains as claimed by the assessee - HELD THAT:- In the present case, what has been done is not merely a realization or a change of investment but an act done in what is truly the carrying on of business in commercial sense. It may be pertinent to notice here the purport and intent of Section 2(13) which defines the expression ‘business’ in an inclusive manner. The expression ‘business’ as defined in Section 2(13) does not merely include any trade, commerce or manufacture but is elastic and wider to include the adjunct ‘adventure in the nature of trade, commerce etc.’ Thus, the legislature has made a conscious inclusion to expand the scope of business to include certain actions akin to ‘business’ in addition to normal business. The activity of the assessee herein has engaged the time, attention and the labour of the assessee apart from money. The profit arising on sale is nearly 30 times of investment in a period of 3-4 years owing to such concerted and planned action. Thus, when functional test is applied, the transaction of purchase and sale of land has been rightly regarded as business activity by the AO. The issue is essentially factual and is governed by the facts of each case. Judicial utterances made in the setting of the facts of a case would thus not supply unless it is shown that facts are identical. We are thus not required to delineate the nicety of law de hors the facts of such case. The reliance placed by the assessee on judicial precedents before the CIT(A) as well as before us are rendered in the fact situation which are substantially different. Thus, no abstract principle can be applied in the present facts. On the contrary, the fact situation is closure to the facts in Raja J. Rameshwar Rao [1961 (3) TMI 4 - SUPREME COURT] and therefore the issue is required to determine in parity therewith. We thus find that the CIT(A) has rightly endorsed the action of the AO. We find no reason to interfere with the conclusion drawn by the CIT(A). - Decided against assessee.
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